(New York) The rebound in oil prices was finally limited on Monday after Friday’s plunge, with the potential consequences of the Omicron variant on the global economy robbing the market of momentum.
In London, a barrel of Brent for delivery in January recorded only a gain of 0.99% to finish at 73.44 dollars, after taking up 5.91% in session.
That’s not much after Brent fell 11.55% on Friday, the worst session since April 2020.
As for a barrel of West Texas Intermediate (WTI) for January as well, it gained 2.64% from Friday’s close and finished at $ 69.95. The benchmark for US crude lost 13.06% on Friday.
“It’s simply the risk of demand destruction (for black gold linked to the new variant) that has the most impact on the market,” said Robert Yawger, head of energy futures at Mizuho. Securities.
Scientifically, information is still lacking on the severity of the cases or the possible resistance of Omicron to existing vaccines against COVID-19.
But several countries have already suspended flights from southern Africa, while Japan and Israel have closed their borders to foreign nationals, in an attempt to prevent the spread of Omicron, a new variant of the coronavirus.
The beginning of the session had been fueled by cheap purchases from “a swarm of operators with a cool head”, after the heatstroke on Friday, according to Louise Dickson, of the firm Rystad Energy.
In addition, the postponement to Wednesday of a technical meeting of the Organization of the Petroleum Exporting Countries (OPEC) and their allies of the OPEC + agreement had given the signal that the alliance was still considering its strategy in the face of this new development. .
“They are expected not to raise their production,” said Robert Yawger of OPEC +, which has so far stuck to the schedule announced in July.
Theoretically, it provides for a monthly increase of 400,000 barrels per day, in order to gradually return to the level of production prior to the pandemic, by September 2022.
Maintaining production rather than increasing would, a priori, be favorable to prices.
“But I don’t know if that would elicit a strong price response,” the analyst warned.
All the more so as, on Monday, the energy security adviser of the US State Department, Amos Hochstein, indicated on the CNBC channel that the US government did not rule out drawing again on its strategic reserves.
Last week, US President Joe Biden decided to use 50 million barrels from these reserves to relieve prices, with very relative success on black gold prices.
The specter of a new American initiative has been added to the fears that the Omicron variant has on growth, to the point of undermining the rebound in prices.